Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5086616 | Journal of Accounting and Economics | 2016 | 19 Pages |
Abstract
Human estimation and inference are subject to systematic biases such as overconfidence and over-optimism. In contrast to prior research that has identified multiple negative consequences of these biases, we focus on positive effects. We empirically examine a setting in which over-optimism a) is a related but different bias from overconfidence, b) emerges dynamically in a rational economic framework, and c) generates higher managerial effort. Importantly, this additional effort improves firm profitability and market value.
Keywords
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Gilles Hilary, Charles Hsu, Benjamin Segal, Rencheng Wang,